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55.02 - Payroll Cost Transfers

January 13, 2011

A. General. Payroll cost transfers are used when salaries and associated benefits are incorrectly expensed on one budget and need to be transferred to another budget. Cost transfers may be made on most budgets; however, if the transfer involves a sponsored projects contract ("K" Accounts), additional steps may be required [See APM 45.07]. [ed. 1-11]

B. Sensitivity of Cost Transfers. Cost transfers are perhaps the most sensitive area in budget management. They are a signal to an auditor that something unusual happened and that further investigation is required. Cost transfers may only be used to correct an incorrect expenses entry into a budget. However, every effort must be made to minimize the need for cost transfers. [add. 1-11]

B-1. Timely Corrections. The allowability of a cost transfer improves when the error is corrected within a reasonable period of time. Good business practices require that a correction be completed within ninety (90) days after the error appears on the Detail by Orgn or Actv Report (DOAR). Cost transfers exceeding ninety (90) days will require additional documentation to include an explanation of the internal control weaknesses that allowed them. For non-K accounts cost transfers requested for a fiscal year that has been closed will not be allowed except in the event of exceptional circumstances. [rev. 7-07, ed. & ren. 1-11]

B-2. Proper Explanation Required. Departments are ultimately responsible for the justification of the cost transfer. The explanation given on the transfer should state in detail how the error occurred, why the transfer is required, how the expenditure relates to the budget, and action to be taken to eliminate future need for cost transfers of this type. Statements such as 'to correct error' or 'clerical error' are not sufficient to withstand an audit. [rev. 7-07, ed. & ren. 1-11]

C-3. Submitting Process. The above documents, completed and properly signed should be sent to the Budget Office (mail stop 3156). If a sponsored project is involved, the OSP payroll cost transfer form must be used and it must be sent to the OSP (mail stop 3020) for approval. [rev. 7-07, ren. & rev. 1-11]

C-5. Work Study Cost Transfers. Work Study cost transfers follow the same procedures outlined above, but also require approval of the Work Study Coordinator in the Student Financial Aid Office (mail stop 4291) prior to being sent to the Budget Office or OSP for final signature. [rev. 7-07, ren. & rev. 1-11]

D. Information. Questions about the use of payroll cost transfers should be referred to the Budget Office, (208) 885-6718. For sponsored projects related payroll cost transfers, questions should be referred to the Office of Sponsored Programs (OSP), (208) 885-6651. [add. 7-07, ed. & ren. 1-11]